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Prophets of doom and gloom are often criticized for being stopped clocks: bound to be right, but just twice a day. Financial-newsletter writer and best-selling author Harry S. Dent Jr., by contrast, can lay claim to being a prophet of boom or gloom, depending on the circumstances.

Dent is as comfortable calling for Dow 35,000, as he did 13 years ago, as he is forecasting Dow 3800 now. His 1998 book, The Roaring 2000s: Building the Wealth and Lifestyle You Desire in the Greatest Boom in History, was a New York Times best seller. Its bleaker companion, The Great Crash Ahead: Strategies for a World Turned Upside Down, co-written with Rodney Johnson, will be published this week.

Based on these and similar titles (see below), Dent swings for the fences. But not always with grand-slam results.

Two years ago this month, Dent launched an exchange-traded fund, Dent Tactical ETF (DENT), whose stated objective is "long-term growth of capital," with Rodney Johnson as manager and himself as advisor and strategist.

The past 24 months haven't been especially rewarding. As of last week, Dent's ETF was flat since inception. Over the same period, straightforward ETFs on major indexes—the Standard & Poor's 500, Dow Jones Industrial Average and Russell 2000—realized returns of 15% or more.

No wonder the Dent vehicle only has $15 million in assets. But 24 months does not a long term make. And while his wildly overblown prediction for the 2000s came to grief, Dent claims that investors who read his newsletter were told to take profits by 2008, before the market collapsed. As for the crash to 3800 that he now prophesies, you might be able to make a plausible case for that grim outcome, but that isn't the case Dent makes.

Harry S. Dent Jr. (Dent Sr. made his name as a Republican strategist) is basically a consumptionist. As such, he subscribes to the hoary fallacy that boom-and-bust cycles are mainly driven by consumer spending. To make matters slightly worse, Dent is overly impressed by demographics, believing that consumer-spending growth is almost exclusively determined by the number of folks in their peak spending years, which he specifies with excessive precision as their mid-40s. Since the proportion of people in their mid-40s is due to decline, we can expect a "great crash ahead."

When I expressed doubts to Harry Dent about this approach in a recent face-to-face interview, he responded somewhat predictably by pointing out that consumer spending is 70% of gross domestic product. True enough, but the ups and downs of the economy are mainly determined by the remaining 30%.

Right now, for example, economic growth is hitting stall speed, and real gross domestic product is still below its fourth-quarter 2007 peak. The stock market, still well below its 2007 highs, reflects this poor showing.

But to blame the malaise on consumer spending is quite a stretch. In fact, real consumer spending has already recovered, having exceeded its fourth-quarter '07 heights by the fourth quarter of last year. The sick man of the economy—and the original cause of the bust—is that broad category called "gross private domestic investment," meaning investment in plants, equipment, software, housing and inventories. Despite some gains, real gross private domestic investment is still more than 16% below its peak of fourth-quarter '07.

True, growth of personal-consumption expenditures could be faster, but at a 9.1% rate of joblessness, it surely has been holding its own. Moreover, rates of joblessness crucially depend on the performance of that other 30% of GDP, where more than half the economy's jobs are normally found.

CONSUMER SPENDING is by far the most stable part of private-sector GDP. But to the extent that we do find differences over long stretches in consumer-spending growth, we find no noticeable correlation with the performance of the stock market.

Compare the roaring 1990s (1989-99), when the S&P 500 quadrupled in value, with the sick 1970s ('69-'79), when the S&P barely eked out gains. If we subscribe to Dent's theory, we would expect to find that consumer-spending growth in the '90s far outpaced the rate of the '70s. In fact, growth was a bit slower (3.3% per year) from 1989 to 1999, than it was from '69 to '79 (3.5%).

The aging of the baby boomers may well bring a slowdown in consumer-spending growth and a proportionate increase in the growth of consumer savings. We can't be sure, since other factors also play a role, including the rate of unemployment. But to regard a rise in overall savings as any kind of disaster is surely naive. For one thing, more saving also means more investing, which could, in turn, support stock prices.

"I'm going to be honest," Dent told me at one point, in a mild state of exasperation. "I can't explain this to economists." Quite right.